Wednesday, July 29, 2009

Perks

Despite their denials, influential Democratic Sens. Kent Conrad and Chris Dodd were told from the start they were getting VIP mortgage discounts from one of the nation's largest lenders, the official who handled their loans has told Congress in secret testimony.

Both senators have said that at the time the mortgages were being written they didn't know they were getting unique deals from Countrywide Financial Corp., the company that went on to lose billions of dollars on home loans to credit-strapped borrowers. Dodd still maintains he got no preferential treatment.

Dodd got two Countrywide mortgages in 2003, refinancing his home in Connecticut and another residence in Washington. Conrad's two Countrywide mortgages in 2004 were for a beach house in Delaware and an eight-unit apartment building in Bismarck in his home state of North Dakota.

Robert Feinberg, who worked in Countrywide's VIP section, told congressional investigators last month that the two senators were made aware that "who you know is basically how you're coming in here."

"You don't say 'no' to the VIP," Feinberg told Republican investigators for the House Oversight and Government Reform Committee, according to a transcript obtained by The Associated Press. . .

Both senators were VIP borrowers in the program known as "friends of Angelo." Angelo Mozilo was chief executive of Countrywide, which played a big part in the foreclosure crisis triggered by defaults on subprime loans. The Calabasas, Calif.-based company was bought last July by Bank of America Corp. for about $2.5 billion.

Q And in your communications with Senator Conrad, whether the one phone call you identified or the e-mails you exchanged with his office, do you know whether he was aware that he was getting preferential treatment?

A Yes, he was aware.

Q And why did you say that?

A By preferential treatment, I mean specifically the suite of advantages, whether he's knocking the points off, knocking the junk fees. I have to preface it by that we were not allowed to tell anybody what the points were being waived, but we can tell everything else; and, any person, FOA, VIP, whatever they were that was coming through there, it was always instilled in them to let them know their sense of importance of where they were. And that you are, were a friend of Angelo's. You were referred by Angelo. You were approved by Angelo. There were many different ways of saying it, so the discount was there and we would let them know. . .

Q And do you know if during the course of your communications with Senator Dodd were his wife that you ever had an opportunity to share with them if they were getting special VIP treatment?

As Senator Christopher J. Dodd of Connecticut assumes a central role in the debate over health care, the pharmaceutical industry has helped finance efforts to bolster his image back home as he braces for a potentially bruising re-election contest.

The industry’s campaign-style push for Mr. Dodd, part of a larger effort to highlight the work of certain lawmakers around the country, portray him as a defender of ordinary citizens in brochures sent to more than 100,000 homes in Connecticut and in a 30-second television spot that ran for three weeks.

For Mr. Dodd, the support provided by the Pharmaceutical Research and Manufacturers of America, or PhRMA, the industry’s lobbying arm, comes at a politically sensitive, if not awkward, time. He is trying to combat a perception that he has become too close to powerful interest groups in Washington after 28 years in the Senate.

As part of that effort, Mr. Dodd’s own campaign has produced two videos, "Lobbyists Cry" and "The Blues," presenting him as a politician who has caused grief for Washington lobbyists. He also sent a fund-raising solicitation asserting that lobbyists do not have access to him.

"The lobbyists can’t get meetings with Chris," the solicitation says. "He won’t return their phone calls. He even yells at them during hearings."

But even as Mr. Dodd attempts to distance himself from these special interests, he is clearly relying on their help as he prepares for his re-election, a reality seized upon by his Republican critics.

He has not only benefited from the hundreds of thousands of dollars in advertisement courtesy of the pharmaceutical industry and Families U.S.A., a health-care advocacy group the industry teamed up with. But a few weeks ago, Mr. Dodd attended a $1,500-a-plate campaign fund-raiser sponsored by lobbyists representing U.S. Oncology, a provider of cancer drugs and services.